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Here at Direct One Mortgage, we appreciate your interest and will be more than happy to answer any questions you may have. It is inevitable that you may have questions so we have provided here an overview of the mortgage process. We also realize that many of your questions will be case specific and invite you to ask. No questions are irrelevant, so feel free to Email us with anything you don't understand.
Mortgage Loan Process Overview
Whether you are purchasing or refinancing, each process will begin with an application. On the application you will see is the necessary information for the property we are dealing with and well as the assets and liabilities that you may have. With the application our first step is to then run a credit check to see your current credit situation. We then take the information of your current assets (provided in the application), assess the liabilities on your credit report and with that can make a determination of which loan programs we can qualify for. If you have excellent credit and household income, congratulations, getting a loan program may be as simple as shopping for the lowest rates available. If you have had some past credit problems, don't despair; we have loan programs that should suit your needs as well.
An appraisal is then ordered to assess the property of the loan. An appraisal will give you an impartial value of the real property and protects you from an unscrupulous price. It also gives us a loan to property value (LTV) ratio that allows us to know how much of a loan may be granted. When enough information is gathered we then match you up with a loan programs that you feel comfortable with. In most cases, we will have many to choose from and would be more than happy to explain the advantages of each to you. At
Direct One we believe that the customer is entitled to great choices and will always encourage the program that saves you the most money. (Yes, really - we're sure you'll be pleasantly surprised!)
The next step is to submit your application to a potential investor. We work with the information you provide us to present the very best application; an application that show your greatest strengths and your creditworthiness. We work as your agent and it is your interest that we protect. Whereas a bank will demand your information good and bad and then make an assessment to protect their interest, we receive no payment if you do not get your loan. After submission, an underwriter looks over the application (to see if everything is in order) and informs us about loan approval. In most cases we will receive news within twenty-four hours and many of those we find out the same day.
Statistically over ninety-percent of our loan applications are approved, so at this point, we expect to be in great shape. In some cases we will receive a list of conditions from the underwriter that will ask us to reinforce the statements we made in the application are true. These most often consist of documents showing funds available, savings statements and income/pay stubs. If everything is in good order then the rest is up to us. We then work with the escrow and title company in coordinating the funding. You should expect the escrow company to organize the close of the sale and be into your new home.
A great misconception of lenders is that many companies and banks lead you to believe that they will be the ones to offer the money for your loan. The great majority of mortgages are handled by this type investor (or servicing company/wholesaler) then resold to Fannie Mae/Freddie Mac or into mutual funds, such as those on Wall Street. All too often the servicing company is mistaken to be the lien holder of your loan, but in reality, the funds for these mortgages and backed by a collection of individuals, investors like us. Even the largest banks resell their loans and all their profit comes from either offering higher rates or points and fees. At
Direct One we have streamlined our business operation to offer only mortgage loans and deals with mortgage investors at all levels. In this way, we know that our rates and loans will compete with the best available while still giving reputable and knowledgeable service and support.
GOOD FAITH ESTIMATE: We want to assist you with how
much you will need for your closing costs. Please ask for a good faith
estimate so you can determine if you have enough money in your savings
account to purchase your new home.
Application Fee: Unlike some lenders and mortgage brokers, we do
not require any upfront fees. We can tell you whether you are approved
or not and this will cost you absolutely nothing.
Appraisal Fee: Once you are credit approved, we will need to order
an appraisal from a state certified and licensed appraiser. The cost of
this will vary from your location as well as the cost of your home.
The fee usually will vary from $300 to $400 or more.
Title Insurance Fee: This will vary depending on the amount of the
loan and the purchase price of your home. Please check with your real
estate agent if you are purchasing a home.
Escrow Fees: This fee will vary from $500 for a straight refinance
to $1,000 or higher for a purchase. We will shop for you to find the
most reputable and the best escrow company near the city in which you live.
Processing Fee: This will vary from $500-750 depending on
the type of loan you are applying for.
Investor's Fee: In all cases, our investor's (or lender)
require a fee to include underwriting as well as document preparation. This
will vary from $600-975.
There are some other third party fees such as tax service, recording fee,
as well as your property taxes. Please ask us for a complete Good
Faith Estimate. To see a sample, click here.
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